Political insiders start firm targeting cap-and-trade cash

A group of people with ties to California Gov. Jerry Brown (D), the state Legislature and several key agencies yesterday announced that they have launched a new advocacy firm that will be focused in large part on helping businesses, tech firms and investors access bounty from the state's carbon reduction program.

Clean Tech Advocates came together because there's "just a few billion dollars on the table of cap-and-trade revenue," said Patrick Leathers, founder and team leader for the company.

"The billions aren't there yet, but they are starting to come into the state of California," Leathers said. "It's a new source of funding to help the clean tech industry. This will continue on for years.

"Money is available for entities, companies, industries that implement activities that reduce greenhouse gases," Leathers added.

California this month officially launched its program that caps carbon emissions and requires companies with the highest greenhouse gas pollution to submit allowances for those gases. The Golden State held its first auction in November, with 23 million tons of carbon dioxide permits sold at $10.09 per ton. Another auction is planned for this month.

Brown in his proposed budget for 2013-2014 set out categories for spending an estimated $600 million from allowance sales (ClimateWire, Jan. 11). The revenues are expected to increase to $1 billion annually or more as more industries fall under the cap.

Cap-and-trade money by law must go toward programs that meet the purposes of A.B. 32, the state law that aims to lower greenhouse gas emissions to 1990 levels by 2020. The governor and Legislature have targeted efforts that cut carbon pollution in transportation, electricity generation, agriculture and forestry.

Clean Tech Advocates is promoting the idea that a major financial opportunity awaits. On its website home page, a screen reads "Available now: Millions of dollars in California state funding for advanced clean technology." It also notes that it's a benefit to the state with "more jobs, a healthy environment and a thriving economy," and adds, "Let's work together to cultivate a new approach to energy, climate change, and the environment."

Environmentalists have said they will be watchful of how the money is spent. Ann Notthoff, California advocacy director for the Natural Resources Defense Council, has warned that "auction revenues are not a slush fund. They are to be used to reduce [greenhouse gas] emissions in California."

Leathers said his firm, which is based in Sacramento, also will focus on making sure California's landmark program unfolds as it was intended.

Linda Adams, a principal at Clean Tech Advocates, previously worked as California Environmental Protection Agency (CalEPA) secretary. She said that she is committed to ensuring the success of environmental policies she helped craft.

"We're at a critical time as California's cap and trade system, still in its infancy stage, reaches important milestones and as lawmakers work to meet California's renewable energy goals," Adams said in a statement. "Companies are left piloting uncharted territory while unaware of the opportunities available."

The firm is based in California, but Leathers said that the opportunities under cap and trade are available to clean technology companies outside the Golden State.

"Everybody in the country should be looking at it," he said.

Clean Tech Advocates also will be working on issues related to water in California.

Deep political ties

The new firm brings together a group of insiders who have been involved in Golden State politics for many years. Adams was secretary of CalEPA under former Gov. Arnold Schwarzenegger (R). She was the governor's lead negotiator on A.B. 32, Leathers said. Adams stayed after Brown's election until August 2011. She also worked as chief of staff to former State Controller Steve Westly and as legislative secretary to former Gov. Gray Davis (D).

Another principal, Jim Boyd, is a former California Energy Commission member who retired from the CEC in December 2011 after a decade. Before that he was deputy secretary, chief of staff and energy adviser at the California Resources Agency, where he was involved in climate policies. He also worked on energy in the aftermath of the state's electricity crisis in 2000-2001.

Boyd spent 15 years as the CEO of the California Air Resources Board (CARB). That agency now is implementing cap and trade as well as other parts of the climate law.

Leathers has worked as a lobbyist in Sacramento for many years, including with the Gualco Group for more than a decade. That firm represented companies that included the Agricultural Council of California, Covanta Energy Corp. and several municipal water authorities. Before that he ran his own law and lobbying shop. Earlier in his career he worked as special assistant for agricultural issues for former state Assemblyman Vic Fazio (D), who later served in Congress.

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